As a homeowner, you never want to face down the possibility of bankruptcy. It’s a taboo word and in some households even uttering the phrase is considered bad luck. This is largely due to how bankruptcy is seen as the worst case scenario for any homeowner. Due to how bankruptcy is represented in places like the media it is pictured as you losing everything. Including your home. Such a thought is terrifying for homeowners.
While we can’t guarantee that you will keep your home when dealing with bankruptcy what we can say is that it’s not as bad as it is pictured. Bankruptcy is there to help anyone that is in serious financial strife and this is the case for anyone that is dealing with serious debt.
Sometimes that debt is the cause of homeownership. While we all would like to believe that owning a home is the ultimate goal it is not always financially viable. In some cases it is actually one of the leading causes of our financial struggles.
This financial difficulty in homeownership comes from the simple fact that some of us are in homes that we can’t really afford. This is something that will happen when incomes change due to either a massive life change, such as losing your job, or a larger expense appearing and taking priority.
These financial difficulties can be problematic for people in unstable financial situations and this can contribute towards bankruptcy. It will take something such as a mortgage and make it feel like a minor expense compared to the larger ones in front of you. However, as those missed payments build up it eventually rolls into a much larger debt. One that could cost you your home.
When you are a homeowner and you are in serious debt you need to consider your options. One of the best ones in front of you may bankruptcy. While this sounds like a scary word you should consider what bankruptcy means.
If you file for bankruptcy and are successful you will:
- Be cleared of much of your debt
- Gain a fresh start
- Possibly lower your stress
- Gain a chance at new homeownership
Bankruptcy is not the great evil it is depicted as. It can help you salvage your finances and if you do it at the right time you may even be able to keep your home. If you need assistance in this process you can speak with us here at Blake Goodman. We can assist you in figuring out how your financial situation can be salvaged and if bankruptcy is the answer.
If we decide that filing for bankruptcy is the best option for you the next step will be deciding what kind of bankruptcy you can file for. Since this could potentially be homeownership related this step may decide if you are able to keep your home or not. Unfortunately, if the bill is far too high you may be forced to liquidize assets to ensure that your bill is paid off.
If you must file Chapter 7 bankruptcy then your debt is going to be removed from your name in exchange for the liquidation of valuable assets. This process can feel painful, but it will ensure that you are debt free after you have completed the bankruptcy process. Your life will be better off once you are free of the debt that is hounding you everywhere.
If you have a certain level of income, and we can argue that you qualify for it, you may qualify for the slightly more favorable Chapter 13 bankruptcy. With Chapter 13 you will not be forced to give up many, if any, assets. You will instead have your debts rolled up into a lump sum that must be paid off monthly.
What Will Happen To My Home?
What will happen to your home from here will largely depend on the kind of bankruptcy you are entering.
If you are looking to save the property, a Chapter 13 bankruptcy will allow you to pay off those missed payments over a three to five year period. In order to complete your Chapter 13 plan, you will need to be able to pay both your arrearage payment and your ongoing mortgage payments at the same time.
If you make all of the payments under both your Chapter 13 repayment plan and your ongoing mortgage payments, you should be able to avoid foreclosure and remain in your home.
If you are unsure of how you can possibly pay off your debt during a three to five year period then please work with us. Our experience with debt settlement and bankruptcy gives us a thorough understanding of what we can do to best help you take your debt and slash through it in the three to five year period that is necessary to pay it off.
How a Chapter 7 helps with a foreclosure?
If you know that you will not able to get caught up within five years or you want to surrender the property, you may consider a Chapter 7 bankruptcy. A Chapter 7 bankruptcy provides a short delay in a pending foreclosure. The foreclosure proceeding is typically stopped while a chapter 7 bankruptcy is pending – which is usually three to four months.
Receiving a discharge in a Chapter 7 bankruptcy relieves your personal obligation to pay your creditors back. This does not mean that you get to keep the home without paying the lender for those missed payments. The lender still retains a right in your property even though your personal liability gets discharged in a Chapter 7 bankruptcy. What a Chapter 7 discharge will do is relieve you of any foreclosure deficiency judgment. It will also discharge any homeowner’s association amounts owed up until the day the bankruptcy is filed.
Know that once the Chapter 7 bankruptcy case is over, the lender may continue foreclosing on the property.
If you feel like this may be the situation you’re in, or if you already know this is the situation you’re in, then you may want to consider bankruptcy. If you act soon enough you may be able to save your home. If not then you could lose your home in the bankruptcy process itself.
Learn about your options and what’s available to you from Blake Goodman. Our expert bankruptcy team can give you your options and see if you really do need to begin exploring bankruptcy.
Don’t let homeownership become a burden. That should be an expense you are proud of. Not one you dread. Contact Blake Goodman today at (808) 426-2004 You can also use his online contact form.
Not in Maui? Come see our other offices!
At Blake Goodman, we strive to help as many of you as possible. This is why we have offices in not only Maui, but in O’ahu as well. Be sure to check out our other website DebtfreeHawaii.com to read about our other locations.
You may be in need of help for bankruptcy in a place other than Maui and we want to help you. We will do our best to help any residents of this beautiful state. Everyone deserves someone to represent them during bankruptcy.